The impact of adopting shareholder primacy corporate governance on the growth of the financial market in developing countries. By

.

153^ See P. Drucker, ‘A crisis of capitalism’ Wall Street Journal (30 September 1986) 31; J. Stein, ‘Takeover threats and managerial myopia’ (1988) 96 Journal of Political Economy 61–80; M. Porter, ‘Capital disadvantage: America's failing capital investment system’ (1992) 70 Harvard Business Review 65–82; B. Hall, ‘The stock market's valuation of R&D investment during the 1980’s’ (1993) 83 American Economic Review 259–264

154^ See S.H. Chan et al., ‘Corporate research and development expenditures and share value’ (1990) 26 Journal of Financial Economics 255–276; S. Szewczyk et al., ‘The valuation of corporate R&D expenditures: evidence from investment opportunities and free cash flow’ (1996) 25 Financial Management 105–110; L. Chan et al., ‘The stock market valuation of research and development expenditures’ (2001) 56 Journal of Finance 2431–2456; Mohsen Saad and Zaher Zantout, ‘Stock price and systematic risk effects of discontinuation of corporate R&D programs’ (2009) 16 (4) Journal of Empirical Finance 568-581; for studies which show mixed results see D. Chambers et al., ‘Excess returns to R&D-intensive firms’ (2000) 7 Review of Accounting Studies 133–158; A. Eberhart et al., ‘An examination of long-term abnormal stock returns and operating performance following R&D increases’ (2004) 59 Journal of Finance 623–650.

155^See Alfred Haid and Jürgen Weigand, ‘R&D, liquidity constraints, and corporate governance’ (2001) Journal of Economics and Statistics 145-167; Kee H. Chung, Peter Wright and Ben Kedia, ‘Corporate governance and market valuation of capital and R&D investments’ (2003) 12 (2) Review of Financial Economics 161; Rob Bauer, Robin Braun and Gordon L. Clark, ‘The emerging market for European corporate governance: the relationship between governance and capital expenditures, 1997–2005’ (2008) 8 (4) Journal of Economic Geography 441-469

156^ Till date only Centre for Business Research, University of Cambridge produced an extended shareholder protection index in a panel data format for ten variables for ten years from 1995-2005 for twenty-five countries available at accessed on 12 June 2015

157^ See Marco Pagano and Paolo Volpin, ‘The Political Economy of Corporate Governance’ (2005) The American Economic Review 1005

158^ Djankov et al. (n 32)

159^ Though it is quite invaluable for country level analysis. It is possible to extrapolate the IPO numbers from log results of listed domestic companies per year, however this data will be a poor proxy for the amount of money collected by these IPOs, also the number of listed domestic companies is already part of the financial development index so absence of number of IPOs will not erode much from the model.

160^ See generally R Darrell Bock, ‘A brief history of item theory response’ (1997) 16(4) Educational Measurement: Issues and Practice 21-33; R Hambleton, H Swaminathan and H Rogers, Fundamentals of Item Response Theory: Measurement Methods for the Social Science (SAGE 1991)

161^ Alfred Binet, ‘New methods for the diagnosis of the intellectual level of subnormals’ (1905) 12 L’Annee Psychologique191-244 as cited in Robert M. Thorndike, ‘IRT and Intelligence Testing Past, Present, and Future’ in Susan E. Embretson and Scott L. Hershberger (eds), The New Rules of Measurement: What Every Psychologist and Educator Should Know (Psychology Press 1999)

162^ Cycril Burt used the Binet scale on British school children and published the results in C Burt, Mental and scholastic test (PS King & Son. 1921); Refinement to the Simon-Binet test was first proposed in 1916 by Stanford University psychologist Lewis Terman. For further revision of the scale see Lewis Madison Terman and Maude A. Merrill, Measuring intelligence: A guide to the administration of the new revised Stanford–Binet tests of intelligence (Houghton Mifflin 1937)

163^ Louis L. Thurstone, ‘A Method of Scaling Psychological and Educational Tests’ (1925) 16 Journal of Educational Psychology 433- 451 < http://www.brocku.ca/MeadProject/Thurstone/Thurstone_1925b.html>

164^ Bock (n 160) 21; See also L Thurstone, ‘A Law of Comparative Judgement’ (1927) 34(2) Psychological Review 273-286

165^ David Thissen and Lynne Steinberg, ‘Item Response Theory’ in Roger E. Millsap and Alberto Maydeu-Olivares (eds), The SAGE Handbook of Quantitative Methods in Psychology (SAGE 2009)

166^ Thurstone (n 163) Figure 2

167^ ibid Figure 1

168^ Burt (n 162) 132–133

169^ Thurstone (n 163) Figure 5

170^ Bock (n 160) 22

171^ Ronald Fischer, ‘Theory of statistical estimation’ (1925) 22 Proceedings of the Cambridge Philosophical Society 699-725; R Fisher and F Yates, Statistical tables for biological, agricultural and medical research (Hafner 1938)

172^ See M.W. Richardson, ‘The relationship between difficulty and the differential validity of a test’ (1936) 1 Psychometrika 33–49; G.A. Ferguson, ‘Item selection by the constant process’ (1943) 7 Psychometrika 19–29; D.N. Lawley, ‘On problems connected with item selection and test construction’ (1943) 62A (1) Proceedings of the Royal Society of Edinburgh 74–82; L.R. Tucker ‘Maximum validity of a test with equivalent items’ (1946) 11 Psychometrika 1–13 as cited in Thissen and Steinberg (n 165)

173^ See generally R D Bock, ‘The mental growth curve reexamined’, in D J Weiss (ed.), New Horizons in Testing (New York: Academic Press 1983); R J Patz and L Yao, ‘Vertical scaling: statistical models for measuring growth and achievement’, in C R Rao and S Sinharay (eds.), Handbook of Statistics: Psychometrics (Amsterdam: North-Holland 2007); V S L Williams et al., ‘A comparison of developmental scales based on Thurstone methods and item response theory’ (1998) 35 Journal of Educational Measurement 93–107; W M Yen and G R Burket, ‘Comparison of item response theory and Thurstone methods of vertical scaling’ (1997) 34 Journal of Educational Measurement 293–313.

174^ P Lazarsfeld, ‘The logical and mathematical foundation of latent structure analysis’, in S A Stouffer et al. (eds.),

Measurement and Prediction (Wiley 1950) 362–412.

175^ Frank B. Baker, The Basics of Item Response Theory (2001) 7